TÁC ĐỘNG CỦA ĐÁNH GIÁ HIỆU QUẢ CÔNG VIỆC ĐỐI VỚI KHẢ NĂNG GIỮ CHÂN NHÂN VIÊN: SO SÁNH GIỮA CÁC DOANH NGHIỆP PHẦN LAN VÀ VIỆT NAM

Four features of a performance appraisal system, which are goal setting, supervisor - subordinate relationship, rewards linked with performance result and fairness issue are [r]

THE EFFECTS OF PERFORMANCE APPRAISAL

ON EMPLOYEE RETENTION: A COMPARISON OF FINNISH AND VIETNAMESE ENTERPRISES

Nguyen Ha Thua*

aThe Faculty of Economics & Business Administration, Dalat University, Lamdong, Vietnam

Article history

Received: July 24th , 2016 | Received in revised form: November 05th, 2016

Accepted: November 16th, 2016

Abstract

This research aims to identify the features of a performance appraisal system and explore how each feature affects the employees’ loyalty Furthermore, the study would like to discover if these effects are different in different cultures The author applied qualitative method, and the data were collected through 15 semi-structured interviews (including cases conducted in Finland and cases interviewed in Vietnam) Participants chosen for the research were knowledgeable employees working in Vietnamese or Finnish original enterprises Four features of a performance appraisal system, which are goal setting, supervisor - subordinate relationship, rewards linked with performance result and fairness issue are argued based on literature review From empirical studies, a variety of findings is identified supporting and supplementing for existing theories One of those is the emphasis of self-development based performance appraisal in Finland and the rewarding based one in Vietnam The performance appraisal system has weak impact on Finnish employees’ loyalty; while it does influence Vietnamese individual intention to leave the job The findings also illustrate that Finnish staff take clear goal setting and fairness as prerequisite features of a performance appraisal; Vietnamese employees, in contrast, view the relationship with supervisors and rewards received as more significant criteria This study provides suggestions of retaining talents for managerial practices Findings of the research could assist international managers to concentrate on features which strongly affect the employees’ satisfaction and loyalty when they design and implement performance appraisal system in different locations

Keywords: Employee retention; Fairness issue; Goals setting; Performance appraisal;

Relationship with supervisor; Rewards

1 INTRODUCTION

In a long history of human resources research, performance appraisal (PA) is mentioned in different perspectives and approaches Chiang and Birtch (2010) defines a PA is “an objective, rational, and systematic way” containing a communicative process and commitment between organizations and the employees such as feedback, reward,

equity to manage and enhance the workforce performance Tziner, Joanis, and Murphy (2000), on the other hand, suppose a PA system as a developmental tool, which focuses on rating scale formats, to reach two purposes: (1) Assisting employees to recognize their strengths and weaknesses for individual improvement; (2) Referring to a reward, inner transfer or demotion decisions Through this process, employees could know the rewards if they achieve the goal setting, and the consequences if they perform poorly in their assignments and how they can improve their working productivity Consequently, PA system as one of the HR practices has been introduced and become one of the sustainable competitive advantages of many multinational firms (Gruman & Saks, 2011)

These issues obviously affect the satisfaction and the engagement of the employees towards organizations in various levels However, the question whether these factors influence employee retention has not been widely addressed among research in this field In addition, the research would like to discover that among above-mentioned factors affecting a performance appraisal system, which one has the most dramatic influence on the employees’ decisions in staying and devoting for the company or leaving and seeking for another opportunity in another firm Moreover, the research also concerns about whether these effects are the same in every corner of the world, or they are different from different nations, values and cultural behaviors, especially in Western and Eastern countries Therefore, findings of the research could be useful suggestions for international managerial practices in general and HR practices in particular in managing people in distinguishing cultures effectively, especially for multinationals when designing a suitable performance appraisal system for each location

In short, this study fullfills three purposes First, it identifies determinants of a performance appraisal system Second, it discovers the main differences between performance appraisal systems in different cultures And last, it studies the effects of each characteristic of the performance appraisal system on employee retention in Western and Eastern countries, for which Finland and Vietnam are chosen to research since these two countries could demonstrate two reverse cultures

2 DETERMINANTS OF A PERFORMANCE APPRAISAL SYSTEM

2.1 Goals setting

company and its employees to discuss and share the company’s demands and the individual expectations in each period of work; and after the negotiations and discussions, they could compromise an agreement for the same objectives (Smith & Brouwer, 1977) 2.2 Relationship between supervisors and their subordinates

Prior studies have emphasized the strong influences of supervisors-subordinates relationship on the PA outcomes, such as job satisfaction, working commitment and loyalty (Deluga, 1998; Elicker, 2006) In terms of leader - member exchange theory, the in-group members or the employees with high quality relationship with their supervisors have higher chances to raise their voice in the PA session (Elicker, 2006) Since the in-group employees are more confident in communicating with their managers, they could clarify and resolve their problems as well as discuss about their expectations Therefore, the feeling of justice is easier to perceive (Elicker, 2006)

The question is that how to build a high-quality supervisor - subordinate relationship As figured out in leader - member exchange theory, the quality of this relationship is contributed by both material and non-material exchanges to enhance the mutual benefits (Golden & Veiga, 2008) The leaders could offer the invaluable information, the attractive tasks and positions, the developmental trainings, the interesting challenges, the extra break-time days or the increased salary and bonus In return, the employees would express the motivating working attitude, the loyalty or the high respect (Golden & Veiga, 2008)

2.3 Rewards linked with the performance appraisals

The linkage between appraisal outcomes and developmental rewards (promotion, internal mobility, financial bonuses, learning opportunities, salary increasing) has a significant impact on improving the employees’ satisfaction (Evans et al., 2011) When the PA is tied with promised benefits including either material or non-material rewards, individuals have more motivation to achieve their working targets Mayer and Davis (1999) proposes that a PA system which clarifies and increases the connection of performance and rewards could enhance the organizational trust, which is the basement of individual commitment and loyalty The reason could be the consideration of reward as part of psychological contract; thus, to strengthen this contract, the expected and deserved rewards should be allocated In contrast, if the rewards are not compatible with the employees’ expectation, the psychological contract could be broken, resulting in the reduced commitment and working satisfaction Explaining from the social exchange theory, the employees will continue devoting their efforts for the companies (or remaining the relationship with their firms) when they perceive that the rewards which they receive from their contribution and their working outcomes are deserved On the contrary, if the employees suppose that the benefits which their enterprises reward them are too small compared with their working, they would seek for another position Additionally, the rewarding mechanism is only effective if the employees’ working results are rated correctly and differentiated As the objectives of rewarding is to praise staff contribution and encourage them to perform better, a same score rated for every member leading to the same bonus could make talents feel unfair and disappointed (Lawler, 2003)

2.4 Fairness of the performance appraisal

In order to explain the level of fairness, the equity theory could be applied From the equity theory, the individuals compare their input-output ratios with their colleagues to conclude the degree of fairness/justice; So in performance appraisals, the employees will compare their self-evaluation to the rating they receive from their appraisers and with others’ results (Erdogan, 2002) Jr and McNall (2010) suppose that even the employees receive the negative evaluation; they could accept it as fair if they perceive the interpersonal interactions and informational communications are fair In Kavanagh and Brown (2007) findings, the justice perception is strongly related with the employees’ involvement level in goal setting session, their understanding of PA process and the supervisor’s attitude It means that if the subordinates are interactive and active in communicating in PA discussion and they consider their supervisors as neutral or unbiased, they are satisfied with the PA results

This study claims that organizational communication, rating results and rewards distribution are interrelated to the quality of supervisors - subordinates’ relationship because the supervisors have to involve in every step of the PA process Therefore, people in the high-quality relationship are more satisfied and justice-perceived than those in the low one

Figure Relationship of PA features and job leaving

to achieve them, the treatment of supervisors and the rewards If one of those three factors is not fulfilled, the unsatisfied or unfair feeling could occur, which is the origin of the leaving intention Therefore, this study supposes that the perceived feeling of inequality is the main cause of job hopping (Figure 1)

3 CULTURAL DIFFERENCES IN PERFORMANCE APPRAISAL SYSTEM

3.1 Hofstede’s cultural dimensions

From 1968 to 1972, there were approximately 116,000 questionnaires conducted by Hofstede in multinational corporation IBM in 72 different countries (from which 40 countries were initially analyzed) (Hofstede, 1980, p 11; Hofstede, 2001, p 41) Based on his findings, Hofstede developed a cultural framework describing effects of a societal culture on the values of its members, which includes four main dimensions: Power Distance; Individualism – Collectivism; Uncertainty avoidance; and Masculinity - Femininity (The Hofstede Centre, 2014a; Hofstede, 2001, p 41) In 1988, the fifth dimension: Long-term versus short-term orientation or the Confucian dynamism was added by a new cross-national study in China (Hofstede, 2001, p 41; Hofstede & Bond, 1988) This study utilizes the Hofstede’s cultural dimensions as primary foundation for analysis

3.1.1 Power distance

Applying these assumptions to the PA system, in high power distance countries, it is probably difficult and pressure for the employees having comfortable conversations with their supervisors about their real opinions or feelings Therefore, the goal setting session could be dominated by the leaders Furthermore, the subordinates are more likely to passively accept the evaluations and the rewards without any upward feedbacks However, because of the hierarchical organizational system, the rewards are distributed upon the positions rather than the real contributions and the results (Chiang, 2005) Combined, as mentioned in previous session, the PA needs two-way communication to reduce the misunderstandings Hence, the probability of a low-quality leader - follower relationship and the unfair perception could occur in these high power distance cultures, leading to the employees’ dissatisfaction and then the thought of leaving On the contrary, in low power distance nations, the mutual communications in PA progress are encouraged, leading to the active participation of employees (Chiang & Birtch, 2010) It means that the subordinates in low power distance cultures are supported to express their expectations, their ideas as well as their arguments; and thus, their working outcomes and their satisfaction positively increase

3.1.2 Individualism versus Collectivism

The dimension of individualism refers to the bonding degree of an individual towards his society (Hofstede, 2005, p 51) In individualistic cultures, it is focused on personal achievements, developments and individual rights People are expected to take care of themselves, their interests and their close families only Therefore, in this kind of culture, the relationship of supervisors and their subordinates is based on business transaction, which means that a poor performance leading to the firing consequence could be normally accepted (Hofstede, 2005, p 64) In contrast, in collectivist societies, individuals act as members of a cohesive group and they put the organizational rights as the priority (The Hofstede Centre, 2014b) For the exchange, the group will protect its individuals, resulting in the preferential treatment of in-group members regardless of their working productivity (Hofstede, 2005, p 64)

the individual competitiveness (Chiang & Birtch, 2010) Therefore, the rewards linked with the PA are used to increase the motivation and the material rewards such as financial incentives are more effective (Chiang & Birtch, 2010; Chiang, 2005) However, in the collectivistic societies, the performance does not refer to the individual working efficiency, but to the whole group outcomes For which, it is less different in individual appraisal results, and thus, less different in rewards distribution (Chiang & Birtch, 2010) In addition to the rewards, the non-competitive ones based on experience or tenure are used in this culture to praise the loyalty of group’s members (Chiang, 2005) Furthermore, there are differences in judging and rating in PA progress The first reason is that the collectivistic culture respects “the face”, in which direct and negative feedbacks are mostly avoided (Chiang & Birtch, 2010) The second one could be the relationship of in-group and out-in-group employees with their supervisors Even the in-in-group members perform poorly, the supervisor still protects them and praises them Out-group members, on the other hand, are treated by regulations or under-rewarded regardless their efforts or their great achievements Besides, this study argues that because the PA mostly focuses on the individual performance, it could be considered as unnecessary in collectivistic cultures in which people are rated as the same

3.1.3 Uncertainty avoidance

The dimension of uncertainty avoidance is the extent of tolerance for the unknown situations in a specific community or the degree of willingness to take risks (Hofstede, 2005, p 113) People in cultures with strong uncertainty avoidance tend to be more emotional The individuals in these countries will try to minimize the occurrence of unknown and unusual circumstances by carefully planning and implementing rules, laws and regulations as well as showing little tolerance for inappropriate ideas or behaviors In contrast, people in weak uncertainty avoidance cultures accept the unstructured situations or changeable environments and are flexible with the rules (Hofstete, 2005, p 125; The Hofstede Centre, 2014b)

adequate information and frequent communications to reduce the future risks (Chiang & Birtch, 2010) Therefore, the employees in this culture are motivated by security and certainty, by which justice is perceived with the formal PA and the fixed and non-performance-based rewards are expected to ensure the future (Chiang & Birtch, 2010; Hartmann & Slapničar, 2012; Hofstede, 2005, p 125) Besides, because people are hesitant to change, they have a tendency to stay in a company for a long time (Hofstede, 2001, p 169) In comparison, rules and regulations could be flexible in solving problems in low uncertainty avoidance cultures (Hofstede, 2005, p 125) As rules could be broken, the supervisors - subordinates relationships are based on trust and commitment (Hofstede, 2001, p 169) Furthermore, since people are less scared of unknow situations, the employees are motivated by achievements, valued by performance-oriented rewards (Chiang, 2005; Hofstede, 2005, p 125) From this point, it is obvious that people are easy to move to another corporate if they feel unsatisfied with their current job Besides, since formality is not highly concerned; it is supposed to diverse the PA measurements to make employees percieve the equality (Hartmann & Slapničar, 2012)

3.1.4 Masculinity versus Femininity

In a long accepted concept, men are supposed to be strong, decisive, assertive, competitive and play the lead role in society; whereas women are supposed to be caring and harmonizing (Hofstede, 2005, p 81) Therefore, the dimension of masculinity is concerned with the gender role issues in a specific culture According to Hofstede (2005, p 82), masculine cultures refer to societies in which the social gender roles are clearly distinguished; while feminine ones imply to cultures in which there are overlaps between men and women’s roles (i.e., both genders are characterized by being modest and tender) In other words, masculine cultures' values concentrate on competitiveness, assertiveness, materialism, ambition and power; whereas feminine cultures’ values stress on relationships and quality of life (The Hofstede Centre, 2014b)

preferable (Hofstede, 2001, p 318) In terms of PA communication, it is claimed that the employees in high masculine cultures have strong intrinsic belief about their capabilities; therefore, they expect the self-management even they seek for the interactive feedbacks (Chiang & Birtch, 2010) Whilst in feminine societies, it is valued on cooperation, human relationships and caring to others (Chiang & Birtch, 2010) The relationship of managers and their subordinates is mostly equal and the problem solving is based on compromise and negotiation (Hofstede, 2001, p 318) Therefore, the developmental communication is emphasized in working environment (Chiang & Birtch, 2010) As stress or pressure is avoided in this culture, the employees expect the fewer working hours and the indifferent rewards allocation (Chiang & Birtch, 2010; Hofstede, 2001) In addition to the reward issues, the feminine-culture employees appreciate the non-material rewards than the material ones The career break-time or childcare services in order to balance the working - living time and increase the quality of life is expected (Chiang, 2005)

3.1.5 Short-term versus long-term orientation

The short-term versus long-term orientation is also named as the Confucian dynamism, which has deeply rooted in a long history of China and affected other neighbors’ cultures Until nowadays, the Confucian lessons are spread among Chinese community, and exist as underlying values of modern Chinese people (Hofstede, 2005, p 165) This dimension refers to the extent to which people in a specific society take the traditions as priorities when dealing with challenges in present (The Hofstede Centre, 2014b) According to Hofstede (2005, p 173), people in long-term cultures adapt the past traditions into the present life while the short-term one’s respect for the traditions In the Hofstede (2001, p 360) findings, leisure time is a significant part of living among short-term countries; whereas long-short-term-culture residents consider hard working as more appreciated Furthermore, as virtue values in the cultural structure of long-term orientation, decision-making and relationship-building are depended upon the moral belief (Hofstede, 2001, p 366)

the status and the face of their leaders The praises of loyalty and belongingness could be the great rewards in this culture In contrast, in short-term orientation ones, the final working results are more concerned and there is separate between business working and interpersonal relationships The following Table is the summary of main differences in PA system in different cultures as discussed above

Table Main differences in PA system in different cultures Features of PA

Cultural Dimensions Goals setting Leaders - Employees relationship

Fairness Rewards

Power distance High Goal setting session is dominated by the leaders Indirect communication Unequal No upward feedbacks to protect the supervisors’ faces Passively accept the evaluations High probability of feeling unsatisfied Rewards are distributed upon the positions

Low Open and

comfortable communication Direct

communication

Equal Discuss the

PA results Satisfying with the results Rewards are distributed upon the outcomes Individualism Individualistic Open and

comfortable communication Active participation to acquire the individual rights

Equal Differentiate

the appraisal results based on performance To increase employees’ motivation Material rewards (financial incentives)

Collectivistic Goal setting session is dominated by the leaders

Unequal Less

Table Main differences in PA system in different cultures (cont.) Features of PA

Cultural Dimensions Goals setting Leaders - Employees relationship

Fairness Rewards

Uncertainty avoidance

High Standardized and formalized PA design Clear guidelines Frequent communication

Based on rules and regulations Fairness is perceived through formal PA process Motivated by security and certainty Fixed and non- performance-based rewards

Low Flexible

problem-solving Ambiguous information

Based on trust and commitment Fairness is perceived through the diversity of PA measurement Motivated by achievement Performance-oriented rewards

Masculinity Masculine Expect the

self-management

Unequal Differences in rewards distribution Higher payment and greater position Feminine Developmental

communication

Equal

Problem solving is based on compromise and negotiation Indifferent rewards allocation Fewer working hours Long-Term orientation

Long-term Less open communication

Virtue orientation Indifferent rewards allocation

To praise the loyalty Experience and tenure rewards Short-term More open

communication Separate between business working and interpersonal relationships Differences in rewards distribution Result-based rewards Material rewards 3.2 Comparisons of PA system in Finland and Vietnam

In empirical study, Finland and Vietnam are chosen to conduct interviews as these two countries are from distinct cultures: The Western nation and the Eastern one

score (score 33), high individualistic culture (score 63), feminine characteristic (score 26), high uncertainty avoidance intention (score 59) and short-term orientation (score 38) In contrast, Vietnam is a high-power distance country (score 70) with collectivistic culture (score 20), feminine distinction (score 40), weak uncertainty avoidance (score 30) and long-term orientation (score 57) Applying the Table in these scores, it could be guessed that in Finland, the PA communication is more open and direct with high involvement of the employees Therefore, the Finnish PA system is designed in formal forms with rules orientation to provide clear guidelines, clear information and interactive feedbacks Moreover, the relationship of managers and their employees are equal and regulation-based, resulting in the separate dividing in the business relationship and the interpersonal one Since Finland has feminine characteristic, Finnish people focus on the quality of life and expect the security Thus, financial insurance and working-balance incentives are highly expected It is predicted that people in Finland rarely consider about changing their job; however, they could leave the company if they have heavy and stressful workload

Figure The cultural comparison between Finland and Vietnam Source: The Hofstede Centre (2014c)

employees derives from the feeling of belongingness However, as Vietnam is the low uncertainty avoidance culture, the employees would like to challenge themselves in different organizations, resulting in the possibility of the high turnover rate

Although both Finland and Vietnam has the feminine feature, when combining with other dimensions, it could be predicted that the quality of superior - inferior relationship in Finland is enhanced by the interactive communication Vice versa, in Vietnam, although people focus on the relationship also, but probably in different ways: satisfying and protecting the ‘face’ of the supervisors Therefore, arguing with the raters is not expected and accepted

Table Main differences in PA system in Finland and Vietnam Countries Features

of PA Finland Vietnam

Goals setting Open and direct communication High participation of employees Formal design with clear guidelines, clear information

Less open communication Rules could be broken

Leaders - Employees relationship

Equal

Regulation-based

Business and interpersonal relationships are separate

Leader has dominated role Status and “face” need to be protected

In-group members are protected Fairness Fairness is perceived through formal

PA process

Differences in rewards distribution

Fairness is perceived through the diversity of PA measurement Indifferent rewards allocation

Rewards Expect the security

Financial insurance and working-balance incentives rewards

To praise the loyalty

Experience and tenure rewards

4 RESEARCH METHODOLOGY 4.1 Methodological approach

This study utilizes both deductive and inductive approaches since each of them contributes to different parts while doing research On the one hand, regarding deductive approach, the paper aims to identify the PA characteristics in different cultures based on previous theories and studies A finalized comparison about PA system in distinguished cultures supposed after analyzing and discussing the literature review is tested in the empirical part The result of the study is to confirm the theory or to explain the gap between theory and reality On the other hand, with regard to inductive approach, the interviews are to explore deeply about employees’ behaviors towards PA system and its extent of effects on their loyalty The objective of this exploration is to discover which features of a PA process have strong influence on working turnover to propose suggestions for both further academic research and managerial practices, which is rarely focused in previous research

4.2 Research design

In terms of interviewing method, most of the interviews in this study were conducted by arranging face-to-face meetings Nevertheless, since the data need to be collected in two different countries in a limited period of time, interviewing via Skype is also employed Moreover, all the interviews were personal ones because of the sensitivity of the research objectives As the research discusses some issues such as the fairness in working environment, the relationship between employees and their supervisors, and their extents of loyalty in the organizations, it could be difficult for the interviewees to express their real thoughts if there are other participants

4.3 Data collection

Primary data for the study were collected through semi-structured interviews in two countries: Finland and Vietnam, containing two phases The first one was the screening phase to select the interviewees The second one was the interviewing phase

Regarding to the first phase, the interviewees chosen were employees in different kinds of industries and they had to meet three following criteria:

 Being skilled-employees, which means that they must have graduated from

universities or colleges

 Working in Finnish or Vietnamese original companies

 Having participated in PA system in their companies

The targeted interviewees were contacted through personal network and were preliminarily screened by informal conversation Those who fulfilled all three above-mentioned criteria and live in Vaasa or Hochiminh City were asked to arrange a personal appointment in a private space (self-study room in university’s library or cafeteria) for the interview Because of the differences in geographical distance, others living in other cities were asked to participate in the Skype interviews Among all the interviewees, there were three cases interviewed via Skype (one in Finland and two in Vietnam)

25 to 30, demonstrating the young labor in two selected societies The interviews in Finland were conducted first in November 2014 within one week; and then Vietnamese employees were interviewed later in January 2015 due to the travelling plan of researcher Given the sensitivity and privacy of the research questions, all the interviews were arranged in the quiet and private space In Finland, rooms in library and university of Vaasa were booked to proceed the interviews since all the interviewees living in Vaasa were familiar and comfortable with these rooms In Vietnam, café space was the preferential choice because all kinds of meeting, even business appointment normally happened in a coffee shop However, café with loud music and narrow space were ignored; Only private corners were chosen for making appointments to reduce the external effects (such us noise, other people) on the interviewees’ answers

At the beginning of each interview, a brief introduction about the research concerns and the affirmation of keeping personal data confidentially were represented; and the using of recorders was asked for permission Although this research focuses on the effects of PA features on the employees’ intention to quit their jobs, the interviewees were not introduced about the research questions They were only asked to answers the questions related to their PA system The reason was to avoid the biased thinking so that the real insights could be explored

While collecting data, all the interviews were both audio-recorded and noted in handwriting The languages for the interviews were English and Vietnamese, in which English was used for interviewing in Finland and Vietnamese was used in Vietnamese cases The length of each interview was approximately 30 to 45 minutes In some interviews, the interviewees provided relevant documents and extra information such as form of PA, the criteria of rating, the general policies and objectives of PA system These supplement documents were sent to the researcher via email

to make a better preparation In Vietnam, language was not problematic since the researcher is Vietnamese However, the questions of the interview were still reviewed regularly after each interview to add further exploration

Furthermore, after every interview, by reading hand-writing notes and listening to audio-records, a transcription was immediately transcribed in full text with highlighted important points and saved in a separate word-processed file, as recommended in Saunders et al (2009, p 485) research

4.4 Data analysis

Data collected from Finnish and Vietnamese employees were processed separately before making comparisons The contents of each interview were deeply examined to figure out the implications explaining the phenomenon It means that each answer was analyzed, divided into small parts and put into different categories Commonly, since the question was clearly categorized, the full answer of that question is also categorized in the same category However, as the interviews were semi-structured and the interviewees’ responses could be extended to another issue or overlapped with other parts, dividing answers into small sub-answers was necessary Afterward, a comparison between employees’ behaviors in Finland and Vietnam was highlighted and applied back to the proposed PA system to identify if the interviews’ results support for the literature arguments A discussion and explanation of these results and comparisons were analyzed then

5 ANALYSIS AND DISCUSSION

5.1 Interviews’ results

5.1.1 Finnish interviews’ results

employee’s ability and working efficiency Furthermore, the PA is emphasized by the self-development aspect; Therefore, PA is a chance to discuss what the upcoming work should be and how to improve the individual effectiveness As a result, there is no pressure when participating in PA discussion Regarding to the supervisor - subordinate relationship, the employee considers it as a part of work which is regulated by rules and working performance Therefore, a personal relationship with the boss could not affect the final rating of each employee Since the real outcomes are appreciated, the same results for everyone are not accepted However, no reward is expected as the employees explain that a system for rewarding is abnormal and if there are financial incentives, high tax policy will make it become almost indifferent with having the regular income All the employees confirm that the PA has no effect on their loyalty None of them has the intention of seeking out a new job As long as their job is not too stressful and too boring, they stay with their companies

5.1.2 Vietnamese interviews’ results

For instance, the supervisors could ignore the mistakes and organizational regulations when rating an employee In other words, building a strong relationship with manager is the synonym of building a strong protection for the employees at working place

Fairness issue in PA process is another matter with diversified insights A PA is considered as fair if it is transparent and published among employees However, when PA result is rated by subjective supervisors, it could not be fair There are some opinions that as PA is not important, it is hard to perceive it as equal or unequal to every member Employees who take part in an administrative PA process believe that PA has no effect on their work in every aspect, including leaving decision In contrast, employees who participate in formal PA discussion claim that PA does affect the loyalty Specifically, if they receive negative PA results, or have bad relationship with their supervisors or are under-rewarded in comparison with their contribution, they will take the job moving into consideration The interesting point is that these employees always have intention of working in another place no matter what they satisfy with their companies or not

Besides, while employees in Finland share more similarities of behaving towards PA perception; Those in Vietnam present their behaviors and thinking differently in most of questions The reason could be the PA system in Finland is designed in relatively similar methods in most of companies In Vietnam, each organization has its own way to implement PA process; Resulting in different PA perceptions and reactions However, eight Vietnamese interviewees still demonstrate the same cultural insights in their working styles and assumptions

Specifically, Finnish employees view PA as a chance to improving individual performance and discussing the appropriate solutions for a problem; While in Vietnam, PA is considered as an assessment tool for staff ability and the key to rewarding the organizational members These understandings are not created from the employees own knowledge They are presented to the newcomers by human resources department and normally are published throughout the whole organization by formal documents As presented in introduction, a PA system has two purposes which are enhancing the employees’ working productivity and motivating them by distributing rewards It seems that Finnish companies focus on the former, whereas Vietnamese firms concentrate on the latter These mindsets have significant impacts on employees’ behaviors regarding PA participation When paying attention to rewarding aspect, Vietnamese employees are under pressure of achieving accomplishment In Finland, because of considering PA as a self-development tool, the employees are more comfortable in finishing tasks They not need to compete with any colleagues They just improve their working for themselves Therefore, it is less likely that leaving job is affected by PA in Finland Vietnamese case is opposite As PA results influence the individual benefits, there is a high possibility of PA system impacting on employees’ retention

5.2.1 Goals setting

From the interviews, Finnish employers encourage their staff to actively participate in PA process, especially in PA communication Every employee has an opportunity to discuss and negotiate with their managers about how to improve the job and how to improve their capability Finnish employees perceive two-way communication as vital part because they need to clarify their tasks and they need to compromise their workload Following Hofstede’s scores (The Hofstede Centre, 2014c), Finland is individualistic and high uncertainty avoidance country Therefore, people live for themselves, fight for their rights and work based on regulations In other words, they not expect the ambiguity in their job Clear responsibilities and clear guidelines are necessary Moreover, Finland is also a feminine nation, where the quality of life and non-stressful work are appreciated (The Hofstede Centre, 2014b) Thus, beside of discussing about yearly targets and self-development, workload and the extent of task challenge are also mentioned in goals setting session

are both negotiated Since the managers have a big or monopoly role in communication, goals are expected to be set from top managers

5.2.2 Supervisor - subordinate relationship

The power distance index has a great influence on leader - member relationship As Finland is a low power distance country, this relationship is equal It means that managers and their followers have the equal rights to raise voice While in Vietnam with high power distance, there is a big gap between supervisor and subordinate status (The Hofstede Centre, 2014b) The research findings are similar with this assumption Finnish employees not hesitate to share their opinions as well as their arguments to their managers They view the relationship with their supervisors as a business matter, which is endured by rules and regulations Therefore, building a specific closeness with managers is no related to having a good performance rating In Finnish perspective, the PA result is based on only the real working performance

5.2.3 Rewards

The research finding of rewarding issue is extremely interesting Finnish employees not expect rewards linked with PA result because they suppose that PA is for self-development; It is not for allocating rewards However, if there are rewards after PA assessment, they prefer the financial incentives The reason for this thinking is not just derived from the companies’ orientation which does not offer rewards in PA process, but the Finnish income taxation From the interviewees, if they receive a financial bonus, they have to pay tax which is high Therefore, it is not too much different with having basic salary PA without rewards hardly motivates employees to work harder and achieve higher targets The interviews’ result illustrates that Finnish staff would like to finish their job completely; However, all of the cases not intend to work above the organizational demands Although there is no reward expectation in Finnish case, the finding still supports for the proposition in Table From Hofstede’s cultural dimensions, Finland has feminine characteristic Finnish residents appreciate a balancing life in which the workload is not too heavy and stressful (The Hofstede Centre, 2014b) Workload and day-offs are not the direct rewards since they could be negotiated in PA discussion However, as non-stressful responsibility is the priority of Finnish staff, dealing about workload could be considered as dealing about indirect reward

rewarded more bonuses Those who deal with their firms about rewards expect the extra offers after PA assessment

5.2.4 Fairness

Employees in Finland believe that they are treated equally and rated fairly because they have a clear system of assessment The result does not derive from the raters only, but the multi-sources Therefore, it is trustworthy In Hofstede’s cultural dimensions, Finland is scored as high uncertainty avoidance (The Hofstede Centre, 2014c) Consequently, formal PA design with clear guidelines is applied, reducing the ambiguity and confusion - main cause of communication misunderstandings This multi-assessment system when implementing strictly could enhance the clarity and the equality

system assume that phenomenon as fair because harming the basis financial benefits of a person is considered as unethical

5.2.5 Effects of PA system on employee retention

The findings demonstrate a very weak impact of PA features on job leaving decisions of Finnish employees and a complicated influence on Vietnamese ones In Finland, the PA purpose is to enhance the employees’ effectiveness without any promised-rewards Therefore, individuals participating PA process have no pressure After PA sessions, they feel satisfied, they trust the fairness and they understand the benefits deriving from PA discussion As argued previously, the perceived feeling of inequality, mainly comprising from the ambiguous and dominated PA communication, subjective raters and under-rewarding, is the main cause of leaving intention Probably since the Finnish PA systems in all interview cases are fair and are not used for rewarding or punishing purpose, it does not affect the employees’ loyalty However, it is noticed that all these cases have no intention to find another job in the future They are hesitant of changing and they are satisfied with an appropriate workload

In addition to the PA features, the findings also figure out that goals agreement and fairness are most important in PA process in Finland whereas in Vietnam, relationship with supervisor and rewards are considered as more significant

6 MANAGERIAL IMPLICATIONS

This study provides an effective framework for international managers while designing and conducting PA assessment in different cultures, especially in Finland and Vietnam In Finland, the research demonstrates that employees take goals setting communication and fairness as priorities and perceive PA as a self-development tool In goals setting discussion, targets, clear guidelines and responsibilities as well as the workload should be negotiated Finnish employees not expect rewards; therefore, rewarding is optional based on each situation However, as Finnish prefer the non-stressful life, non-material benefits such as comfortable working environment, short working hours or day-offs should be taken into account Moreover, Finnish employees gain trust through clear, objective and multi-assessed system Thus, the design of PA needs to be formal, understandable and transparent

In Vietnam, relationship with supervisors and rewarding are chosen as two significant features Vietnamese employees are more open in communicating with their managers when they have close relationship with them Therefore, in order to encourage these staff to share their opinions, the leaders are advised to build an interpersonal relationship with them Interpersonal relationship means that besides business assignments, the supervisors should concern about their employees’ personal matters or holding activities outside the companies with their inferiors In addition to rewarding, financial incentives and promotion are expected However, since Vietnamese individuals are hard-working for better and higher targets, the managers should actively offer the extra bonus if they achieve an excellent result Completing the promised rewards only could not comprehensively satisfy the employees

fairness issue In Vietnam, the different rewards illustrate the individual recognition of their contribution and ability

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of subordinate-supervisor conscientiousness similarity Group & Organization Management, 23(2), 189-216

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APPENDIX: INTERVIEW GUIDELINE

Warm up Name, age, career, company, job position, and so on General

exploration

Do you have PA system in your current company? How often you have to the PA?

Do you think it is necessary to the PA? Why?

What are the purposes of the PA in your opinion? How you understand these purposes? (from your own knowledge or from your company’s communication)

Specific exploration

Can you describe the procedure of your PA system? Goal setting

How you understand each evaluation criteria?

When you know such criteria (at the beginning or when doing PA) Who interprets the goals for you?

Do you feel engaged with these goals? Why?

Does it affect much when knowing the criteria in advance? PA communication

Which ways of communication your company using to conduct the PA? Which ways you feel the most effective?

Have you ever received the negative feedbacks?

How did your supervisor make the negative comments? Is it directly? How you feel with the direct negative feedbacks?

Fairness + relationship with supervisor How is your relationship with your supervisor? Are you comfortable to communicate with her/him?

Do you feel pressure when discussing the PA result with her/him?

If you are not satisfied with the PA result, you ask to her/him or you accept it?

Do you think the PA in your company is fair? Why? Rewards

Do you receive any promise of rewards relating to PA results? Does the company keep its commitment?

Are you satisfied with the rewards? Are they deserved and they reflect to your contribution?

Do the rewards fit with your expectation? Why?

Do you expect the different rewards for each individual or the same for everyone?

Relationship with employee retention

Are you satisfied with the PA system in your company? Why?

Does the PA process affect your working efficiency and your satisfaction? Why?

Does it affect to your loyalty? Why?

Which characteristics affect to you the most (rating characteristics) How long you think you will stay in this company? Why?

TÁC ĐỘNG CỦA ĐÁNH GIÁ HIỆU QUẢ CÔNG VIỆC ĐỐI VỚI KHẢ NĂNG GIỮ CHÂN NHÂN VIÊN: SO SÁNH GIỮA CÁC

DOANH NGHIỆP PHẦN LAN VÀ VIỆT NAM Nguyễn Hà Thua*

aKhoa Kinh tế Quản trị Kinh doanh, Trường Đại học Đà Lạt, Lâm Đồng, Việt Nam *Tác giả liên hệ: Email: thunh@dlu.edu.vn

Lịch sử báo

Nhận ngày 24 tháng 07 năm 2016 | Chỉnh sửa ngày 05 tháng 11 năm 2016 Chấp nhận đăng ngày 16 tháng 11 năm 2016

Tóm tắt

Nghiên cứu tập trung phân tích đặc trưng hệ thống đánh giá hiệu công việc và tìm hiểu đặc trưng tác động lên lòng trung thành nhân viên Ngoài ra, nghiên cứu xem xét tác động liệu có khác văn hóa khác nhau hay khơng Sử dụng phương pháp nghiên cứu định tính, liệu thu thập thơng qua 15 vấn bán cấu trúc (trong đó, bảy vấn tiến hành Phần Lan tám Việt Nam) Đáp viên lựa chọn cho nghiên cứu nhân viên văn phòng làm việc doanh nghiệp Việt Nam Phần Lan khơng có yếu tố nước ngồi Từ lược sử nghiên cứu, bốn đặc trưng hệ thống đánh giá hiệu công việc sử dụng để phân tích bao gồm: Thiết lập mục tiêu; Mối quan hệ quản lý - nhân viên; Khen thưởng; và Tính cơng Qua nghiên cứu thực nghiệm, kết củng cố bổ sung cho lý thuyết quản trị nguồn nhân lực Một số nhấn mạnh hệ thống đánh giá nhân viên nhằm phát triển cá nhân Phần Lan hệ thống đánh giá nhân viên làm cơ sở cho khen thưởng Việt Nam Ở Phần Lan, việc đánh giá hiệu cơng việc có tác động khơng đáng kể đến lịng trung thành nhân viên, đó, tác động lớn đến định thay đổi công việc Việt Nam Nghiên cứu nhân viên công sở Phần Lan cho thiết lập mục tiêu tính cơng hai tiêu chí quan trọng nhất hệ thống đánh giá công việc; Ngược lại, Việt Nam, mối quan hệ với quản lý và khen thưởng hai tiêu chí quan trọng Nghiên cứu đưa gợi ý việc giữ chân nhân viên quản lý doanh nghiệp Kết nghiên cứu giúp nhà quản lý toàn cầu tập trung vào đặc trưng tác động mạnh đến hài lòng lòng trung thành nhân viên họ thiết kế thực thi hệ thống đánh giá hiệu công việc các quốc gia khác

Từ khóa: Duy trì nguồn nhân lực; Đánh giá hiệu công việc; Khen thưởng; Mối quan hệ

emotional rules, relationships nd quality of life http://geert-hofstede.com/